Posts Tagged ‘Chinese Sweatshops’

Defenders of sweatshop conditions in China say that low wages are the result of the impersonal workers of a hypothetical free market. But a recent study (links are below) shows the real cause is the structure of the supply chain linking components producers such as Foxconn to customers such as Apple Computer.

When I hire a painter to paint my house, and he hires a helper, the free market works the way it ought to work because there is a rough equality of buying power. But no such equality exists when individual workers are dealing not just with corporations, but with networks of corporations.

The corporate supply chain represents a concentration of power and a diffusion of responsibility. When workers try to negotiate with Foxconn, managers can say that there is as limit to what they can do based on Apple’s requirements. But Apple managers have no direct responsibility. They can say there is a limit to what they can do based on their fiduciary responsibility to maximize return to stockholders.

You could say government should step in and set minimum wages and labor standards, but at the present time the governments of China and the USA are aligned with management, not workers. Governments will not heed workers until they organize and create a base of power that governments must heed. The workers of the world should unite.

Mike Daisey’s stage show about Apple Computer, to which I referred in a previous post, contained a lot of stuff that he just made up. Foxconn and other components suppliers in China apparently don’t employ child labor on a large scale, as he claimed, though other assertions about labor conditions are confirmed by independent sources. Some stories he told about encounters with Chinese workers apparently were invented.

Mike Daisey

All this came to light after the WBEZ radio in Chicago, the producers of This American Life, had second thoughts about a program they aired on Mike Daisey and distributed over Public Radio. They did their own investigation and issued a retraction. Then they did a whole new program about their mistake.

I give WBEZ credit. The managers took corrective action as soon as they realized there was a problem. They didn’t fire the whistleblower or try to cover up. This is a level of integrity which ought to be routine in large organizations, but isn’t.

Mike Daisey is not a reporter, but what he did is something that reporters often are tempted to do. They have a good news story, and reach for an extra embellishment that would make it an even better story, which discredits the whole thing.

The other thing to remember is that the problem isn’t just Apple Computer, but the whole system of outsourcing to China. If this controversy results in an improvement in Apple’s labor practices, this will be good. But if it merely results in shifting of business from Apple to other companies that are no better or possibly worse, nothing will be gained.

Apple Computer, Nike, Wal-Mart and many other companies depend on Asian sweatshops as suppliers—a sweatshop being defined as a factory with low pay and benefits, long working hours and child labor.

Some writers, including Nicholas Kristof, who reports from Asia and Africa for the New York Times, and Paul Krugman, winner of the Nobel Memorial Prize in Economics, say that in historic perspective, Asian sweatshops represent a step forward. As bad as conditions are in China or Cambodia, they are better than they were under Mao. As tough as it is to work in a Foxconn factory, many find it a lesser evil than rural poverty. As bad as it is to have a young child working 12 hours a day in a factory, it is better than being sold into prostitution, if that is the only alternative.

SF writer Bruce Sterling made this argument many years ago in an article in Wired magazine about megaprojects in China and elsewhere.

China has a very bad government. Nobody should fool themselves about this. It’s a profoundly corrupt one-party dictatorship based on a bankrupt, morally discredited ideology.

However, the current Chinese government is certainly the best government any living Chinese citizen has ever seen.

The 21st century is almost upon them now [this was written in 1998]: cologne, panty hose, Asian pop videos and maybe even a car. The Chinese people are definitely with this program. They know how much they have to lose.

Defenders of Asia sweatshops go on to say that there were sweatshops and child labor in the United States in the early days of industrialization, and, so they argue, this laid the foundation of the prosperity that we enjoy today.

The problem with this argument is that the sweatshop advocates are saying to the Chinese workers: Thus far and no further. Because conditions were even worse in the past, you can’t expect any improvement in the future.

U.S. companies such as Apple Computer, Nike and Wal-Mart are not just adapting to Chinese conditions. They are collaborating with the Chinese government is keeping conditions as they are. If Chinese workers had the freedom to bargain collectively, I would not tell them they were settling for too little. But you can’t claim to be an advocate for Chinese workers and at the same time deny them a voice.

What I would ask of Apple, Nike or Wal-Mart is that the company live up to its own professed standards. This would require two things:

Have labor standards audited by a truly independent organization, such as the Hong Kong-based Students and Scholars Against Corporate Misbehavior, and publish the results of these audits. There would be no need to set new standards. Let the auditors use existing corporate standards.

Cancel bonuses of an executive who subcontracts to a supplier that fails to meet the minimum labor standard. So long as executive compensation is based solely on financial criteria, and labor standards are merely aspirational, the latter will be ignored.

We the people could choose to buy only from companies that have independent audits and meet minimum labor standards. Shareholder activists could demand independent audits and labor standards. The U.S. Congress could finance independent auditors and impose taxes or penalties on imported products produced under inhuman conditions.

This would not mean the deindustrialization of China or other poor countries. It would be a lever to both protect American workers and improve conditions in those countries. It would not be a zero-sum game. Prosperous Chinese would be good potential customers.

Such leverage has been used to improve the quality of manufactured products. The ISO 9000 standards for assuring a quality manufacturing process spread outward from Germany to the European Union to the whole world. It should be possible to use similar techniques to inprove labor standards.

The strenuous efforts by the Chinese government and Chinese governments to suppress unions and blacklist malcontents, and the suicides among stressed-out workers at Foxconn, the big Chinese electronic components supplier, show that Chinese workers—some of them, at least—want something better than they have. We Americans should not be accomplices in holding them down.

Somebody named Tony Shin e-mailed me a link to an infographic about the abuse of Chinese sweatshop workers who make components for Apple Computer. It is well-done and accurate, and that is why I reproduce it below.

But I don’t want to single out Apple as if it were greatly different from the world’s other electronics companies or, indeed, any company that outsources to China. As I type this, I am wearing a shirt “Made in Cambodia”; I doubt the Cambodian workers enjoy better conditions than Foxconn workers in China.

Now the fact that other companies engage in bad practices doesn’t mean that Apple management is not responsible for their own company’s practices. What it does mean is that nothing is to be gained by boycotting Apple if it just means shifting to Microsoft or Sony or some other company that uses the same suppliers. In fact, if I were more cynical than I am, I would suspect that some of the campaign against Apple is being orchestrated by Apple’s competitors. [Added 3/15/12. Maybe I ought to be more cynical.]

As you look at the infographic below, keep in mind that what it depicts is more than the moral blindness of just one company. It is a whole system of production and distribution that encompasses many companies besides Apple and many nations besides China and the United States.

Foxcomm and other Chinese electronics suppliers force their workers to work under conditions so inhuman that Foxcomm requires its new hires to sign a no-suicide pledge. American, European and Japanese companies that hire these suppliers are well aware of these conditions, but do nothing. The late Steve Jobs demanded action in six weeks to produce a scratch-proof surface for the i-Phone, but procrastinated for years about doing anything about his own company’s reports on substandard working conditions.

Bill Black, associate professor of economics and law at the University of Missouri and an expert on white collar crime, gave a good rundown on the situation in this interview in the Real News Network. He points out that the Chinese suppliers violate their contractual obligations with their U.S. customers and their Chinese workers, and also violate Chinese law.

So it is not a question of imposing American standards on the Chinese. We have a right to hold the Chinese to their own standard, just as other countries have a right to hold us Americans to the standard of our laws and Constitution.

How could this be done? Congress could enact a law empowering the U.S. Commerce Department’s International Trade Administration to impose penalty tariffs on imports of products made under conditions that violate international labor standards and the domestic laws of the country of origin.

The U.S. government could adopt a policy of only purchasing electronics equipment, especially for the military, with U.S.-made components. This would be wise on national security grounds. If the U.S. has a military confrontation with China, we don’t want the Chinese to be in a position to cut off supplies vital to our military.

Labor and consumer organizations could recognize companies that obey the law and refrain from fraud, and we the people could patronize these companies.

Congress probably would have to revise or cancel the World Trade Treaty. The World Trade Organization authorizes punitive action against countries that engage in unfair trade practices, such as dumping products at prices below cost. But it has never, so far as I know, authorized action against unfair labor standards.

Globalization under these conditions could be a force for raising wages and improving working conditions around the world, rather than driving them down to the lowest possible level.

It’s not as if having suppliers pay decent wages would force Apple Computer and other electronics companies to go broke.

Last year President Barack Obama met with Apple CEO Steve Jobs and other Silicon Valley executives, and asked what it would take to have Apple’s iPhone manufactured in the United States. Jobs said nothing could bring iPhone manufacturing back to the U.S. The New York Times published a good article last month explaining why.

Apple had redesigned the iPhone’s screen at the last minute, forcing an assembly line overhaul. New screens began arriving at the plant near midnight. A foreman immediately roused 8,000 workers inside the company’s dormitories, according to the [Apple] executive. Each employee was given a biscuit and a cup of tea, guided to a workstation and within half an hour started a 12-hour shift fitting glass screens into beveled frames. Within 96 hours, the plant was producing over 10,000 iPhones a day. “The speed and flexibility is breathtaking,” the executive said. “There’s no American plant that can match that.”

Thomas Friedman wrote a column saying American workers have no future unless they can compete with that Chinese awesomeness. But I don’t know of any American workers who would get up at midnight for a 12-hour shift on a biscuit and cup of tea unless they were (1) slaves, (2) prisoners or (3) in the military, the latter of which was held up by President Obama in his State of the Union address as a role model for society.

Working conditions in China, in my opinion, are the result not so much of the invisible hand of competition as the iron fist of government suppression. Workers aren’t free to join unions and bargain collectively for better conditions. Complaining will get you blacklisted, and forming a union is against the law. The only way of protest open is the traditional Chinese option of threatening or committing suicide.

In the United States, labor unions in their heyday had work rules. They defined exactly what an individual worker could and couldn’t be required to do. In return many of the unions took on the responsibility of training apprentices in the skills that employers now say are lacking.

I remember working on newspapers in the days of hot type, when composing rooms were ruled by the International Typographers Union, one of the strongest and also most democratically run U.S. unions. One ITU rule was that nobody but a union member could touch type metal. The compositors and typesetters would all watch any newcomer out of the corner of their eyes, and if he let his hand fall idly on a tray of type, all work in the composing room would instantly stop. Good fun!

Like anything else, union work restrictions can be carried too far. But the alternative is unscheduled 12-hour shifts on subsistence wages, and a biscuit and a cup of tea.

I use Apple products. I don’t have any reason to think the late Steve Jobs or Apple Computer were or are worse than other Silicon Valley companies or executives, nor that electronics companies are worse in this respect than other kinds of companies. While I don’t think Jobs or Apple should be singled out, neither do I think “everybody does it” constitutes an excuse.